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The team did well but lost in the second round of qualifying play in mid-July. It is the only large tract of land near the beach remaining in Budva. The deal remained secret for three months, until the contract was mysteriously distributed as a flyer across Budva naming the new owners. Faced with public scrutiny, the director said the investors, a man from France and one from Switzerland, would present a design for the land in a few months. The deal is one of many in Montenegro that has linked business, government and organized crime in a tightly wound relationship. These unholy alliances have increasingly given Montenegro an international reputation as a criminal state. Rajko Kuljaca, former mayor of Budva for many years headed the board of the Mogren football club. In January , Kuljaca and club director Boro Lazovic signed a contract to make the transfer of the public land. Mogren has had all it takes to be a successful club. It has loyal fans, is owned by the local municipality, is well-financed by local authorities, and its board was then headed by Rajko Kuljaca, who had always been a supportive mayor. In , the city said it would give the club a new home and a new stadium to replace the basic facility where the team played. In November of that year, local authorities decided to deed the football club nearly 80, square meters of land, the size of 11 standard football pitches, located in a remote area on the slopes of Dubovica Hill. The city also gave the club a far more valuable piece adjacent to their current stadium. Lazovic promised in local newspapers that the club would not sell their new and valuable public land. View the plan for relocation of the stadium. Following World War II, the Communist regime had confiscated the land and other assets of rich families. In March , Montenegro had passed a law allowing the return of unused land, and various families opened proceedings to get their land back. So far they have failed. But despite the decision, local authorities waited more than one year until January when Mayor Kuljaca and club director Lazovic signed a contract to make the transfer. Lazovic was true to his word that he would not sell the land. Instead, he gave it away. Less than a month after the transfer, before the new land had even been officially registered in the name of the club, Lazovic signed a partnership deal with two companies: Nova Star CG and Amsone Enterprises Montenegro. Lazovic also threw into the deal an additional 8, square meters of adjacent beachfront land that was owned by the state. The contract does not provide details on how the club would get that additional public land, and appears to ignore the law requiring a public tender for the sale of public land. View the plan for the new development. Amsone Enterprises Montenegro would administer the project, while Nova Star CG would pay for construction of a mixed residential and commercial complex on the land which would include two towers and a business center. It did not specify where the money would come from. But according to its financial reports, the company had no income or other sources of money and began piling up losses from day one. The first director of Novastar Investment CG, and the man Lazovic signed the contract with, was Bosko Krlovic, an employee whose usual job for the football club was mowing the grass. The first director of Novastar Investment CG, at the time majority owned by drug kingpin Darko Saric, was Bosko Krlovic, an employee whose usual job for the football club was mowing the grass. Novastar Investment CG was incorporated in Montenegro in March , three weeks after the deal was signed, listing road and highway construction as its primary business activity. Amsone Enterprises Montenegro is owned by a similarly named Cyprus company , which is in turn owned by Elisano Holdings Limited, a company incorporated in the British Virgin Islands, a secretive offshore jurisdiction often used to hide ownership. Montenegrin authorities did not release all records they had on the company. Both companies are registered in the US state of Delaware, another jurisdiction commonly used by criminals in the Balkans and Eastern Europe to hide their illegal proceeds. Jestrovic is currently on trial. In late October , when the contract was leaked to the public, the families who had formerly owned the land expressed outrage. Budva officials said they knew nothing of the deal. Lazovic told the Montenegrin daily newspaper Vijesti on Oct. But the actual contract showed the club would not have any ownership of the new residential and business complex on the beach. That would be one quarter owned by Amsone Enterprises Montenegro and its secret owner and three-quarters owned by drug lord Saric. He later changed the story to say it was a French-Swiss company. He did reveal one other detail: that the deal signed six months earlier was actually arranged in early That corresponds with the period when Saric started to pour his drug money into Montenegro, according to indictments in different countries. The director of Mogren football club Boro Lazovic is well known in Budva as an influential local businessman and head of the Budva branch of the ruling DPS. Photo: Vijesti. Another crisis that had nothing to do with global finance had also occurred. Saric evaded arrest despite months of surveillance by the police and was on the run for more than four years until his arrest in March Adriatic Overseas Holdings is an important company that ultimately connects Darko Saric, Serbian businessman Stanko Subotic and Milo Djukanovic, three people who were intimately tied together through First Bank and a series of real estate deals. For example, Adriatic Overseas Holdings took over the bankrupt San Investments, a company that Central Bank documents say is among a group of companies owned by Subotic, a controversial Serbian businessman and close friend of Djukanovic. Blagota Radulovic left and Petar Ivanovic right have worked together for several years, first at the Montenegrin Investment and Promotion Agency and currently at the Ministry of Agriculture and Rural Development of Montenegro. Both have been linked to drug lord Darko Saric. The real ownership of Adriatic Overseas Holdings is unknown, but one man who knows the truth is the current Minister of Agriculture of Montenegro, Petar Ivanovic, a man close to the Prime Minister and a professor at his private university. He was also previously the director of the Montenegrin Investment and Promotion Agency where Radulovic also worked as his employee. Djukanovic has been closely associated with Ivanovic and the issue of foreign investment for years. The letter said Adriatic Overseas Holdings instructed them to send the documents to him, indicating Ivanovic is somehow related to the company. The power of attorney for Adriatic Overseas Holdings was in the name of Zorica Djukanovic it is not clear if she is related to the prime minister. The lawyer, like many people involved in the deal, is tied to both the Djukanovic family and Darko Saric. Zorica Djukanovic previously represented Aco Djukanovic, the brother of the prime minister, in a real-estate deal. There are other connections between Ivanovic and Saric. Montenegrin daily Dan revealed last year that Ivanovic traveled to France with Saric associate Loncar. Dan revealed records from the travel agency showing that the tickets for both men were bought at the same time and place by the same person and that Saric paid. Ivanovic told Dan he did not know Saric and said he sees no reason for further communication. In January , Montenegrin police seized documentation on the transfer of public land to the FC Mogren club and started an investigation of club officials. The prosecutor has not acted in more than three years on the case. The club registered the land in its name in but the project is still ongoing and the government approved the development last year. Meanwhile, the status of Adriatic Overseas Holdings in the contract is still not clear and all records are being held by the prosecutor. Who owns the development now and where the money will come from is, like so many things in Montenegro, also not clear. Along with Mogren fans, the other losers are the descendants of the original land owners. If someone does not want to return assets then they will do everything make sure that does not happen. The rules are in place to prevent banks from being used for money laundering. First Bank routinely and in many cases systematically failed to collect the required information. For example, when setting up accounts for Delaware-based Lafino Trade LLC and Seychelles-based Camarilla Corporation, the First Bank failed to obtain valid copies of registration records as well as copies of identification cards for people with access to the accounts. Both companies were controlled by Darko Saric and both were used for money laundering, according to prosecutors. Dusko Saric appealed and his sentence was changed to five and a half years in December Copic was also sentenced to six years in prison in absentia in Serbia in February. Saric was an important customer but it is not clear how much money he had on deposit. The company Lafino Trade was listed among the top 10 foreign accounts posting the largest number of transactions although the report does not mention exact amounts. It also had the 13th largest amount of money on long-term deposit. In May , Dusko Saric was sentenced to eight years in prison for money laundering through First Bank of Montenegro. He appealed and his sentence was changed to five and a half years in December While all banks are obliged to report suspicious transactions to the Anti-Money Laundering Agency of Montenegro, First Bank never reported a single suspicious transaction from Lafino or Camarilla, according to testimony at the trial of Dusko Saric by Predrag Mitrovic, head of the agency at the time. The company was used in a land deal with the Budva football club Mogren. But this was not the only business First Bank transacted with Saric. Jovica Loncar was a proxy for Darko Saric, the indicted drug lord. He served as a front person for companies that Saric established in Montenegro and Delaware. First Bank gave two loans to Mat Company, a company registered in for retail trade. According to a Serbian investigation, Mateniko was heavily used for money laundering. Finally, in late , Mateniko was replaced by Jovica Loncar, a front person for companies that Saric established in Montenegro and Delaware. The source of repayment was to be business income. The purpose of the loan was working capital for the company. An analysis from Central Bank examiners showed that at the end of , Mat Company had low profitability. It also had a low level of liquidity, according to a January report. A examination by the Central Bank along with an analysis of financial statements for and showed the company was chronically losing money. Trecom was founded by Radulovic, who worked with Saric. Aco Djukanovic is the biggest shareholder of First Bank of Montenegro which Darko Saric helped by depositing millions at a time when it was struggling to meet the demands of customers for their money. Lafino Trade helped out First Bank significantly. Normally, depositors who agree to leave money in a bank for a long time are paid higher rates. The only other depositors with such a low interest rate were bank owner Aco Djukanovic 1. While Saric may have been the biggest criminal working through First Bank, he is not the only controversial figure who used the bank. OCCRP has reported that indicted cigarette smuggler Brano Micunovic and his wife got very good deals from the bank including an unsecured line of credit. Montenegrin non-governmental organization MANS has reported that Albanian drug kingpin Naser Kelmendi was allowed to make large cash deposits at the bank. OCCRP will publish tomorrow a story about the relationship between the bank and Stanko Subotic, a Serbian businessman who was indicted in Serbia for abuse of office related to the smuggling of cigarettes. Serbian businessman Stanko Subotic and Montenegrin Prime Minister Milo Djukanovic go back a long way, ever since the late s when Montenegro was a smuggling haven. Both were indicated for cigarette smuggling by an Italian court. Subotic was acquitted in Djukanovic invoked diplomatic immunity. The award was not quite all it seemed. Its sponsoring organization, the AAHS, is a public relations and lobbying group that helps promote hotel properties. The country is a fragment of the former Yugoslavia the size of the US state of Connecticut with a population of about , While its biggest city is the capital, Podgorica, its tourism business is centered on several ancient towns on the seacoast. Four miles down the coast lies the even tinier town of St. Budva and St. Stefan share certain characteristics: beautiful situations on the Adriatic Sea, exquisite islands lying just offshore, and a proven track record of attracting well-heeled tourists. By the time Yugoslavia broke apart, he was home and investing in textiles. He made his fortune in the mids in duty-free shops he opened on the border between Serbia and Macedonia. He became the exclusive distributor of major cigarette brands including Philip Morris and British American Tobacco. In he relocated his business to Montenegro, then under an UN-imposed trade embargo, and became friendly with Djukanovic and Marovic, who have essentially controlled Montenegrin politics for the past two decades. There were others interested in the cigarette business at that time. Most nights, dozens of large speedboats crammed with cigarettes made the two-hour crossing from Montenegro to Italy, where the syndicates sold the untaxed cigarettes on the Italian black market. Prosecutors believed Subotic helped the Italian criminals smuggle cigarettes and both he and Djukanovic were charged with smuggling in The following year, Italian authorities dropped the charges against Djukanovic, noting that he had diplomatic immunity. Subotic was acquitted in in the Italian case, but continues to face charges in Serbia connected to smuggling. A main line of defense for the accused was that the illicit cigarette trade took root during the three-year economic blockade of Serbia and Montenegro, stemming from ethnic unrest in Kosovo. The bank is controlled by family of his close friend, Prime Minister Milo Djukanovic. They formed new companies that despite having no history got huge, often unsecured loans with favorable terms that they used to buy up valuable coastal real estate. In December , a month after the bank began churning out loans, Subotic launched what would be a yearlong burst of development activity. It began with the formation of Samuelson Corporation , a real-estate investment company based in the Seychelles, off the coast of Africa. This tiny island state in the Indian Ocean is often used to hide ownership and evade taxes and is among the most opaque and secretive tax havens in the world, according to the Financial Secrecy Index. However, other evidence indicates that the company was owned by Stanko Subotic. Nikola island in March The lovely, uninhabited island lies a kilometer off the coast of Budva. Locals call it the Montenegrin Hawaii because of its three fine sand beaches, dramatic cliffs and flocks of rare birds. Two months later, on Feb. It was used to buy 6, square meters of land — a plot nearly the size of a standard football pitch — in St. Stefan close to his Villa Montenegro. But this time his focus was about four miles to the northwest: the lovely and largely uninhabited island of St. Nikola, which lies a kilometer off the coast of Budva. In March , San Investments signed a contract to buy three connected plots of land on St. The company gained full title to a plot of 7, square meters the size of a standard football pitch , and a one-third share in two plots totaling more than 90, square meters. He built a dock, an artificial beach, and began building a hotel complex all without permits. He decided to sell the land after years of failing to get the required paperwork from local authorities controlled by Marovic. Despite the contractual obligation to pay the full amount in less than two months from the date of purchase, it took Subotic until December to actually pay for the land and register the new ownership. In May, Subotic threw another gala at his Villa. That kind of support prompted local authorities to change their own master plan, the document that maps out what a city will look like in the future, so it would accommodate the grandiose design. Again it appeared as if the audacious plan to make Budva a new Monte Carlo, and Montenegro a new Monaco, was going to happen. In that model, a person starts a new company that purchases land through favorable loans from a friendly bank with deferred interest and lump sum payments due later and with no or inadequate collateral. Then they seek other developers to buy or invest in the projects and use that money to pay off the loans before interest was due. If the deal went well they could make a very good profit without using any of their own money. But if it went bad, the company, like so many others at First Bank, would go bankrupt and they could walk away leaving the bank with the bill. It is important that someone invests a billion. Subotic said the charges were false and politically motivated. Prosecutors eventually charged him with abuse of office of a private company, an outdated charge seldom used since the socialist era. They say he misused his position to allow his company to smuggle cigarettes and was convicted and sentenced to six years. However, a higher court ordered a retrial which is ongoing. Subotic at the time was living in Switzerland and attempts by Serbian authorities to extradite him failed. It was a loan, according to the records. Records do not reveal how much of that stayed in the bank or if some or all of it was used to pay for the island. With no earnings, millions in debt and its owner on the run, San Investments needed still more money. Subotic turned to his old friends again. On Oct. Subotic was indicted on Dec. On Jan. When it was completed, San Investments held full title to more than 37, square meters of the best property on the island. The risky lending caught the attention of the Central Bank of Montenegro, which regulates banks. And things started to unravel fast. Island of St. Nikola is located lies just a kilometer off the coast of Budva. Serbian businessman Stanko Subotic tried to turn Montenegro into the new Monaco by buying the choicest coastal property and promising luxury resorts. As the single largest debtor to the bank, it put both him and the bank in a precarious position. If he were to fail, he would bankrupt himself and maybe the bank — a bank that held huge amounts of government money. And they had good reason to be so. Between and the Central Bank sent six teams of top-notch examiners and hired auditor PricewaterhouseCoopers PwC to look into the operations of First Bank. And it approved a long grace period before making any payment due. Other San Investment loans also were problematic, and some even allowed lump sum payment at maturity. In one instance, the bank said it had given only one loan to San Investment, while examiners found four. On a number of occasions, the Central Bank ordered First Bank to stop its risky practices and comply with the law. With millions locked up in bad loans, in January the bank started experiencing liquidity problems. At the same time, international markets were roiling and international stock markets started a decline that would wipe out one third of their value. The Great Recession was starting and investment money dried up overnight. Real estate prices went into freefall. By the spring, First Bank was in serious trouble and unable to honor withdrawal requests from depositors. Serbia requested his extradition, but Russia refused and two months later, on June 26, Subotic was released. Darko Saric led a powerful Balkan criminal organization which had for years trafficked cocaine from South America into Europe. Media in the region have long speculated on a connection between Saric and Subotic. DEA would not return requests to confirm the identity. Subotic in a later interview said he knew Saric but never did business with him. The Central Bank report is the first public evidence of an association. Subotic had borrowed from First Bank for a variety of businesses. After several delays in signing the contract, on Nov. The bailout was granted on Dec. First Bank allowed Saric, Subotic and others who were responsible for the bank collapse to withdraw their deposits—the very deposits which should have secured their loans. The move was just another example of the strong interconnected business relationships between Saric, Subotic and Djukanovic. On Feb. One day later Samuelson Corporation issued a press release stating it was withdrawing from Montenegro, blaming its inability to obtain necessary permits. Debt was never mentioned. Under pressure from the Central Bank, the property was put up for auction. The first auction failed. Two more followed and also failed. But behind the failed auction, a secret deal was being set up to that avoided future auctions of the valuable land. The bank along with its biggest depositors and debtors, the most powerful people in the country, were in serious financial troubles. They looked outside. On April 20, , Thaksin Shinawatra, former prime minister of Thailand, arrived in Liberia holding a Montenegrin passport. He had been removed from office in a coup and went into self-imposed exile. But Shinawatra had been facing more difficult problems — five days earlier his Thai passport had been revoked. According to Montenegrin law, a person may be granted citizenship in Montenegro as long as he or she has not been sentenced to a prison term. However, Shinawatra had been convicted in absentia for corruption, and Interpol had issued a warrant for his arrest. He got citizenship anyway. Kadfoor Al-Mehairi. Montenegrin officials refused to answer questions about how his citizenship was approved or by whom. The money was vital for First Bank which was in its most critical state, with no cash or way out, and the Central Bank was calling for its liquidation. Al-Mehairi never filled out a form that banks are obliged to complete for all depositors. A year and a half later, court records revealed that the lawyer made the deposit on behalf of Shinawatra. According to court records, Shinawatra, who had made money selling his Manchester City football team, had asked the lawyer to do a number of business transactions for him. These included buying a house in Dubai, and opening an account in his name in a bank in Montenegro. The Investigative Reporting Award Nominee. Montenegro's untouchable Prime Minister Milo Djukanovic, has ruled for more than two decades. Since independence in , Djukanovic has pledged to clean up troubled past that got him and his friends indicted in Italy. For a time Montenegro seemed back on track as a model of successful EU integration. Then a year-long investigation by the OCCRP showed Djukanovic and his family bank sitting in the center of an unholy alliance of government, organized crime and business. The cleanup was just an act. Montenegro: Football, Politics, and Cocaine. He lied, and with a reason. Krlovic refused to comment. Mixing Politics with Cocaine Money The first director of Novastar Investment CG, at the time majority owned by drug kingpin Darko Saric, was Bosko Krlovic, an employee whose usual job for the football club was mowing the grass. Krlovic — Photo: Facebook Novastar Investment CG was incorporated in Montenegro in March , three weeks after the deal was signed, listing road and highway construction as its primary business activity. Radulovic could not be reached for comment. Radulovic — Photo: Bulgaria Economic Forum In late October , when the contract was leaked to the public, the families who had formerly owned the land expressed outrage. Photo: Vijesti Another crisis that had nothing to do with global finance had also occurred. Subotic had big plans for both of them. And it was big business. At the time, cigarette smuggling was endemic in the Balkans. Subotic was among those who benefitted the most. But for the plan to work an investor with deep pockets had to be found. Business, however, proceeded as usual. Montenegro: Buying up Paradise Part 2 Plans to turn the ancient coastal town on Budva into a new Monte Carlo collapsed leaving taxpayers the ultimate bill. Photo by Vijesti Serbian businessman Stanko Subotic tried to turn Montenegro into the new Monaco by buying the choicest coastal property and promising luxury resorts. They found a lot. It did not. Fall of an Empire Serbian businessman Stanko Subotic tried to turn Montenegro into the new Monaco by buying the choicest coastal property and promising luxury resorts. They might not have needed to. Al-Mehairi deposited the money in April , but the arrangement did not end well.
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First Bank of Montenegro, controlled by the family of Prime Minister Milo Djukanovic, was the bank that never said 'no'. Especially to one of its largest customers: Darko Saric, the recently arrested drug lord who did extensive business through the bank. Police and prosecutors say Saric ran an international cocaine smuggling ring which smuggled tons of cocaine from South America to Europe and laundered millions of Euros. Radulovic was later indicted in Serbia for his role in drug trafficking. Saric has just been arrested while Radulovic is being sought by police; Dudic was shot dead while sitting in a square in Kotor in But to the bank, Saric was a trusted customer who at one point helped them by depositing millions at a time when it was struggling to meet the demands of customers for their money. In almost all of these deals, the First Bank failed to follow money laundering laws, its own policies and basic good business practices. Many of the companies that received loans would end up failing. Buying assets through loans is a common way organized crime groups launder illegal money. Some of the loans were never paid off; instead, taxpayers bailed out the bank in a controversial move. It is not clear whether the bank ever repaid taxpayers. The deals raise questions about why a bank would fund such controversial businessmen, many of whom ran companies that showed little or no income and large losses. The country has increasingly developed an international reputation for being a country run by organized crime. The rules are in place to prevent banks from being used for money laundering. First Bank routinely and in many cases systematically failed to collect the required information. For example, when setting up accounts for Delaware-based Lafino Trade LLC and Seychelles-based Camarilla Corporation, the First Bank failed to obtain valid copies of registration records as well as copies of identification cards for people with access to the accounts. Both companies were controlled by Darko Saric and both were used for money laundering, according to prosecutors. Dusko Saric appealed and his sentence was changed to five and a half years in December Copic was also sentenced to six years in prison in absentia in Serbia in February. Saric was an important customer but it is not clear how much money he had on deposit. The company Lafino Trade was listed among the top 10 foreign accounts posting the largest number of transactions although the report does not mention exact amounts. It also had the 13th largest amount of money on long-term deposit. While all banks are obliged to report suspicious transactions to the Anti-Money Laundering Agency of Montenegro, First Bank never reported a single suspicious transaction from Lafino or Camarilla, according to testimony at the trial of Dusko Saric by Predrag Mitrovic, head of the agency at the time. The company was used in a land deal with the Budva football club Mogren. But this was not the only business First Bank transacted with Saric. First Bank gave two loans to Mat Company, a company registered in for retail trade. According to a Serbian investigation, Mateniko was heavily used for money laundering. Finally, in late , Mateniko was replaced by Jovica Loncar, a front person for companies that Saric established in Montenegro and Delaware. The source of repayment was to be business income. The purpose of the loan was working capital for the company. An analysis from Central Bank examiners showed that at the end of , Mat Company had low profitability. It also had a low level of liquidity, according to a January report. A examination by the Central Bank along with an analysis of financial statements for and showed the company was chronically losing money. Trecom was founded by Radulovic, who worked with Saric. Lafino Trade helped out First Bank significantly. Normally, depositors who agree to leave money in a bank for a long time are paid higher rates. The only other depositors with such a low interest rate were bank owner Aco Djukanovic 1. While Saric may have been the biggest criminal working through First Bank, he is not the only controversial figure who used the bank. OCCRP has reported that indicted cigarette smuggler Brano Micunovic and his wife got very good deals from the bank including an unsecured line of credit. Montenegrin non-governmental organization MANS has reported that Albanian drug kingpin Naser Kelmendi was allowed to make large cash deposits at the bank. Banner: Vijesti. Related Articles. Serbian businessman Stanko Subotic has published a letter on e-novine. Montenegro is once again a smuggling hub for cigarettes bound for Italy. Plans to turn the ancient coastal town on Budva into a new Monte Carlo collapsed leaving taxpayers the ultimate bill. See the project. Reported by Miranda Patrucic. April 8th, Join the fight. Hold power to account. Your cookie preferences. We use cookies to improve your experience by storing data about your preferences, your device or your browsing session. We also use cookies to collect anonymized data about your behaviour on our websites, and to understand how we can best improve our services. To find our more details, view our Cookie Policy. Audience Measurement Cookies. Essential Cookies. Accept my choices. Accept all. Close and accept.
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